Continuing from the previous question, identify the price and quantity that will prevail in the Cournot duopoly market
a.) Two identical firms compete as a Cournot duopoly. The market demand is P=100-2Q, where Q stands for the combined output of the two firms, Q=q1 +q2. The marginal cost for each firm is 4. Derive the best-response functions for these firms expressing what q1 and q2 should be.
b.) Continuing from the previous question, identify the price and quantity that will prevail in the Cournot duopoly market
c.) Now suppose two identical firms compete as a Bertrand duopoly. The market demand is P=100-2Q, where Q stands for the combined output of the two firms, Q=q1+q2. The marginal cost for each firm is 4. Identify the price and quantity in this market.
